Justice News

Former CEO Of Scranton Area Federal Credit Union Pleads Guilty To Bank Fraud

SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sean E. Jelen, age 33, the former Chief Executive Officer (“CEO”) of Scranton-based Valor Federal Credit Union (“Valor”), formerly known as Tobyhanna Federal Credit Union, pleaded guilty before United States Magistrate Judge Karoline Mehalchick in Scranton, to bank fraud and attempted bank fraud.

According to United States Attorney Peter Smith, Jelen committed and attempted to commit a series of fraudulent activities from July 2014 to August 2015. During the majority of that time, Jelen served as the CEO of Valor. Valor is a federal credit union, its assets are insured by the National Credit Union Administration which also supervises and regulates it. Valor terminated Jelen’s employment in August 2015.

The fraudulent activities involved forged and altered documents created by Jelen.

Jelen admitted to executing the scheme to defraud Valor of approximately $718,000, some of which went to pay for his personal credit card, his graduate tuition, his spouse’s birthday party, and a golf tournament sponsorship.

Jelen also admitted to rigging elections held for the Valor Board of Directors, whereby he elected and impersonated fictitious members of the Board and its Supervising Committee.

Jelen further admitted that he attempted to obtain an additional approximate $1,146,000 through fraudulent means, and by creating a forged severance contract that would be triggered by his termination.

Valor is a federal credit union, its assets are insured by the National Credit Union Administration (NCUA) which also supervises and regulates it.

The Information seeks forfeiture of property obtained as a result of the fraud, including a residence located in New York. Jelen’s guilty plea was entered pursuant to a The government also filed a plea agreement that was filed by the government in conjunction with the charges in a criminal information on June 15, 2016.with Jelen to the alleged charges, which is subject to approval of the court. Valor terminated Jelen’s employment in August.

Judge Mehalchick allowed Jelen to remain on pre-trial release, subject to travel restrictions and the surrender of his passport. When scheduled, Jelen will be sentenced by United States District Court Judge Richard P. Conaboy.

The investigation was conducted by the Federal Bureau of Investigation (FBI). The case is being prosecuted by Assistant United States Attorneys John Gurganus, Evan Gotlob and Phil Caraballo. Valor’s current management is cooperating with the FBI and the U.S. Attorney’s Office.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under federal law for the charges is 60 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.